Audio of the press conference releasing the recommendations can be found here.
A transcript of the press conference can be found here.
Washington – Business Roundtable (BRT), an association of chief executive officers (CEOs) of leading U.S. companies, today released a detailed plan to strengthen and modernize Social Security and Medicare that CEOs believe must be part of any comprehensive economic growth and deficit-reduction strategy.
“America can preserve the health and retirement safety net and rein in long-term spending growth by modernizing Medicare and Social Security in a way that addresses America’s new fiscal and demographic realities,” said Gary W. Loveman, Ph.D., former professor of economics at Harvard Business School, and current Chairman, CEO and President of Caesars Entertainment Corporation, and Chair of BRT’s Health and Retirement Committee. “We are calling on President Obama and Congress to look at our plan and enact a package of gradual changes that will provide economic and personal security for generations to come.
“By tackling these issues now, Congress can send a clear signal to American workers, investors and the world that our leadership has the courage to make tough choices that will ensure a stable and growing economy,” said Randall L. Stephenson, Chairman and CEO of AT&T Inc., and Vice Chair of BRT’s Health and Retirement Committee. “The facts are clear: If we want future generations to have access to Social Security and Medicare, America can no longer afford to wait. The time to act is now.”
BRT CEOs undertook an extensive review of federal entitlement programs and found that Medicare entails significant inefficiencies and providers are not rewarded for high-quality, cost-effective care. Similarly, while the Social Security system has provided a reliable level of retirement security for decades, demographic changes, including the ongoing retirement of the 80-million person strong “baby boom” generation, have rendered the system unsustainable in its current form. Today, Medicare, Medicaid and Social Security make up 42 percent of the federal budget. By 2020, they are projected to account for half.
BRT’s plan embodies a gradual approach that will modernize the programs while preserving benefits for current retirees and those nearing retirement. They would stabilize America’s long-term finances while preserving the health and retirement safety net for future generations of Americans. BRT CEOs believe these recommendations must be included in any meaningful economic growth and deficit-reduction strategy. Doing so would clear the decks for more robust economic growth and job creation.
“We are committed to seeing these recommendations enacted,” said Loveman. “We will be meeting with Members of Congress and Administration officials and urging them to include entitlement modernization in a balanced package of debt-stabilization measures.”
For Social Security reform, BRT recommends steps that would ensure the solvency of the program for the next 75 years:
- Protecting retirees and those approaching retirement by exempting anyone who is currently 55 or older.
- Gradually raising the Social Security retirement age from 67 to 70.
- Changing benefit formulas to increase progressivity.
- Updating method for calculating cost of living adjustments (COLAs) by using the more accurate Chained Consumer Price Index.
- Including newly hired state and local workers in the Social Security system.
- Encouraging more private savings.
For Medicare, BRT’s plan recommends:
- Gradually raising the Medicare eligibility age to 70, but protecting current benefits for those approaching retirement by exempting anyone who is currently 55 or older.
- Expanding competitive models of care by offering seniors competing and comprehensive private plans in addition to traditional Medicare.
- Reducing taxpayer costs for upper-income beneficiaries by considering means testing for Medicare.
- Protect the safety net for low-income Americans.
Click here to see BRT’s entitlement modernization plan. Click here to read Gary Loveman’s op-ed in today’s Wall Street Journal.